Tax Update for Summer 2019
- Employees should check their paycheck withholding annually
- Some remote retailers, marketplace facilitators must collect sales tax
- More new tax laws — What you need to know
- Our Boise office is moving July 22!
- Tax Commission to administer auditorium district taxes in eastern Idaho
- Sign up for our free tax classes
- Sales tax and income tax guides updated
- Tax hubs help you find what you need
Here's the summer 2019 issue of Tax Update—our newsletter for the business community. This edition features articles about new tax laws, updating paycheck withholding, expanded class offerings, our Boise office move and more!
EMPLOYERS: Did your employees have an unexpected income tax bill this year or have a smaller-than-expected refund? If so, they should update their paycheck withholding NOW to make sure they're withholding the right amount of tax.
If they do nothing, they could owe more tax when they file their 2019 return. That's because new tax laws prompted a change in withholding calculations midway through 2018. The new calculations might have a bigger impact over a full year for employees who haven't adjusted their withholding to reflect the tax changes. Updating their W-4 can help them avoid a potential tax bill.
Review withholding yearly
Workers should review their withholding at least once a year or to account for changes in their life. This includes:
- Getting married, divorced or having a child.
- Having a child age out of the child tax credit.
- No longer qualifying for the "head of household" filing status. (They got married, or their dependent or child no longer qualifies them.)
- Working multiple jobs.
- Earning extra income that isn't subject to tax withholding, like interest or dividends.
Steps for employees to take NOW:
- Use the withholding calculator at IRS.gov to calculate your federal withholding. Update the federal Form W-4 with that information. Don't use the federal number for Idaho.
- Use page 2 of the Form ID W-4 to calculate your Idaho withholding. Fill out Form ID W-4 with that information.
- Give both W-4 forms to your employer.
A new state law requires some online sellers and marketplace facilitators to get permits and collect Idaho sales tax on sales to Idaho customers as of June 1, 2019. (See House Bill 259.)
Here's how the law affects them:
Out-of-state retailers whose sales in Idaho exceed $100,000 a year must apply for an Idaho out-of-state retailer seller's permit to collect the tax. Retailers that have been collecting Idaho sales tax voluntarily will receive a new out-of-state retailer seller's permit with a new permit number.
Note: "Out-of-state retailers" are those that don't have a physical presence in Idaho.
Marketplace facilitators without a physical presence in Idaho, and whose total sales into Idaho — both their own sales and sales they facilitate for third parties — exceed $100,000 a year, must collect the tax for their sales and the third-party sales. They need a separate marketplace facilitator seller's permit to collect and forward the sales tax from marketplace transactions.
Idaho Retailers that Are Marketplace Facilitators
Idaho retailers that also are marketplace facilitators must collect sales tax on any third-party sales they facilitate in Idaho. Idaho retailers that already have a seller's permit for their Idaho sales need to apply for a separate marketplace facilitator seller's permit to collect tax on their third-party sales.
Note: "Idaho retailers" are those that have a physical presence in Idaho.
Idaho Retailers that Use Marketplace Facilitators
Idaho retailers that use a marketplace facilitator to sell their goods should verify whether the facilitator is collecting Idaho sales tax for them. If the facilitator is collecting tax, the retailers shouldn't report those sales on their sales tax returns. If the facilitator isn't collecting the tax, retailers are responsible for collecting it and forwarding the money to the Tax Commission.
Note: "Idaho retailers" are those that have a physical presence in Idaho.
Register to collect Idaho sales tax
Any retailer required or wanting to collect state sales tax for its Idaho customers can register online through tax.idaho.gov/ibr.
For more information, visit tax.idaho.gov/onlinesellers.
The 2019 Idaho Legislature passed tax laws affecting the Idaho child tax credit, public records requests, the occupancy tax and more. Below are some highlights. For more details about the legislation, see the Legislature's website.
Idaho conforms to the Internal Revenue Code (IRC) for 2019
Idaho conforms to the IRC for tax year 2019.
(House Bill 13 – Effective January 1, 2019)
Idaho child tax credit clarified
The Idaho child tax credit is available only to Idaho residents. Nonresidents aren't eligible for it. Part-year Idaho residents can receive a prorated credit for the part of the year they were Idaho residents.
(House Bill 19 – Effective retroactive to January 1, 2018)
Exemption for public records request charges
The charges to fulfill public records requests are exempt from sales and use tax.
(House Bill 15 – Effective July 1, 2019)
Exemption for certain car labor charges
The labor charge to add accessories to a new factory-delivered vehicle is exempt from sales tax.
(House Bill 86 – Effective July 1, 2019)
Tax relief available for occupancy tax
Homeowners and disabled veterans who qualify can get a reduction in the occupancy tax. The occupancy tax applies to newly constructed homes and commercial improvements when they're first occupied. It's paid instead of property tax during the first year the home or improvement is occupied.
(House Bill 62 – Effective January 1, 2019)
Agricultural property exemption clarified
Equipment used exclusively to produce or harvest agricultural products is exempt from property tax. This includes equipment used to pick, move, dry or bale hops; distill mint oil; milk dairy animals; and extract honey.
(House Bill 87 – Effective January 1, 2019)
We're moving our Boise office from 800 Park Blvd. to the west side of the city. On July 22 we'll be open to the public in our new location at 11321 W. Chinden Blvd., Bldg. 2 (former HP campus).
We'll also remain open to the public at our existing 800 Park Blvd. location near downtown Boise through July 26.
Our phone numbers and P.O. Box addresses will stay the same during the transition.
View our printable handout about the move with a map to our new location.
The Tax Commission is preparing to administer the taxes for the Pocatello/Chubbuck and the Idaho Falls auditorium districts in early 2020. That means account holders in those areas will report and forward the auditorium district taxes to the Tax Commission. They'll also see changes to their auditorium district tax returns. Stay tuned for more information.
We've expanded the free classes we offer to taxpayers. They include:
Easy Answers about Lodging Taxes
For those who provide lodging accommodations, such as hotel managers, bed and breakfast owners, campground managers, and people who offer short-term rental of their homes. The course includes information about travel and convention tax, auditorium district tax, and when to charge sales tax.
Sales and Use Tax for Vehicle Dealers
For dealers of new or used vehicles, RVs, off-highway vehicles and watercraft who want to know how to charge and pay sales tax correctly.
Business Basics Class
Sales tax and income tax withholding information for new businesses or those who want to start a business. Available at several of our offices.
Register for a class through our Eventbrite page.
We've changed more brochures into web guides and updated them for easier reading. Here's a list of our newest guides. Check them out online!
- Food, Meals and Drinks. (Replaces the food and drink portion of Publication #16, Food, Drink & Lodging)
- Hotels, Motels and Short-Term Rentals. (Replaces the lodging portion of Publication #16, Food, Drink & Lodging)
- Nonprofit and Religious Groups. (Replaces Publication #50, Nonprofit Groups and Churches)
- Transportation: Ground, Air and Railroad Businesses. (Replaces the common carrier portion of Publication #41, Transportation)
- International Registration Plan (IRP) Vehicles. (Replaces the IRP portion of Publication #41, Transportation)
- Recreation and Admissions. (Replaces Publication #17, Recreation & Admissions)
- Grocers. (Replaces Publication #12, Grocers)
- Off-Highway Vehicles: Snowmobiles, All-Terrain Vehicles, Utility-Type Vehicles and Motorbikes, etc. (Replaces part of Publication #15, RVs, Boats & Aircraft)
- Renting and Leasing Tangible Personal Property. (Replaces Publication #11, Rental & Leasing Firms)
- Withholding. (Replaces A Guide to Idaho Income Tax Withholding.)
- Community Property and Idaho Income Taxes. (Replaces Publication #175, Community Property.)
Need a quick way to find information about a certain tax type or subject? We've got the hub for you. Our website hubs feature organized links to tax-specific information in one place. They make it easier for you to find the resources you need. You can access the hubs through most pages on our website, including this page and the homepage.